Hubwoo’s New Network Launch: Plumbing, Collaboration & More (Part 1)

Last week, Hubwoo announced its "3.0 launch" of its supplier network (Hubwoo refers to it as "The Business Network), a major new release that brings new capability and vision to their business-to-business network -- and for P2P networks in general, for that matter. Perhaps most important of all, the announced release represents the first major product launch that Hubwoo has made to differentiate itself from the SAP ecosystem post-Ariba, positioning its new capabilities to serve the broader P2P and supplier network marketplace including (but not limited to) enhancing SAP MM & SRM initiatives. Prior to the launch, Spend Matters got to talk to Hubwoo all about it, including conducting a pre-release demonstration of the 3.0 network.

The Hubwoo network "follow my company" icon

This series aims to outline the capabilities and vision of Hubwoo's network. We'll explore the enhanced capability in more detail, concluding with a look at how Hubwoo's current new network capability stacks up to Ariba/SAP, Basware, IBX, OB10, TradeShift and others on Spend Matters PRO. But first, let's examine Hubwoo's position on the basic elements of the network solution launch and update. Hubwoo now claims "150+ large enterprise buying customers" using its P2P enabling capabilities, 100 million catalog items, 300,000 daily users and "buyers located in over 70 countries" using its network and application solutions.

Regarding the network itself, Hubwoo positions the offering as a "many-to-many hub of over one million businesses." But as with SAP/Ariba, it's important to look beyond the claims and understand the actual level of commerce taking place on the network, and what percentage of suppliers comprise the bulk of the activity. A quick calculation based on comparisons to what we know of competitive network activity using Hubwoo's own numbers tells us that several thousand suppliers are engaged in the vast majority of the network trading volume to support an annual range of "tens of billions of dollars of commerce."

In other words, like SAP/Ariba, the majority of network activity is still confined to a relatively low number of trading partners – which in and of itself is not a bad thing, but clearly shows the potential of networks to capture more volume in the future. For example, we have no doubt that if two of the five largest companies in the world (i.e., Exxon Mobile, Royal Dutch Shell, Walmart, Sinopec, China National Petroleum and BP) committed all of their indirect and MRO-related spend to a supplier network such as Hubwoo, that the contribution alone would be enough to double (or triple) network transaction activity.

Today, Hubwoo has over 300,000 active suppliers on the network. They've partnered with D&B/Hoovers and have spent the past 6 months working to register an additional 900K suppliers bringing the actual total of businesses they claim to over one million. With this foundation and expanding customer list, Hubwoo's stated goal is to "become the world's largest collaboration hub by continuing to deliver value vs. taxes to all network trading partners." While Hubwoo definitely has a long way to go to reach this vision – especially given how quickly others are also moving in the market – it can certainly lay claim to being a top five indirect procurement network by adoption and volume. 53% of Hubwoo's reported revenue represents its own internal cloud IP (over $23 million), nearly all of which we can attribute to network activity. In addition, another 25% of Hubwoo's revenue represents enablement services ($11M).

Suppliers can maintain a free profile on the Hubwoo network

The standard pitch Hubwoo makes on the buy-side is remarkably similar to Ariba/SAP's. This includes enabling buyers to "increase spend under management and contract-compliant requisitioning" in part by "bringing 100% of suppliers on-board through ... [a] guaranteed supplier enablement commitment." Further, it includes both enabling "electronic transactions across the entire source-to-pay transaction lifecycle" and helping procurement organizations "find qualified suppliers that meet specific criteria." Once suppliers and buyers are transacting together, the focus enters the phase of "facilitating buying with a catalog management and search experience that is intuitive" and "matching and approving supplier invoices in a collaborative electronic invoicing environment."

Hubwoo told Spend Matters that it believes "intelligent invoicing" and related P2P enablement will be the primary bridge to drive further network adoption and traction. In other words, by "solving the approval process" before invoices are presented and driving to more efficient and transactional outcomes in the network cloud itself (e.g., through catalog pricing collaboration, rules-based presentment and approval, pre-matching, legal/VAT compliance and service entry sheet capability for goods, services and rate cards). Spend Matters would lump all of these areas in what we often describe as the "network transactional plumbing/infrastructure" area – significant business value but not necessarily sexy.

Potentially more differentiating (after all, there are many different ways to attack these problems, with or without an open network approach) is a socially-driven network vision that focuses on collaboration outside of just indirect procurement transactions. Hubwoo is staking its claim of being the most collaboratively focused business-to-business network to date with its new vision in this area. We'll continue to explore this particular network concept and more of Hubwoo's 3.0 network launch in the remaining installments of this series.

- Jason Busch

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